NEC Corp. (JP:6701)
:6701
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NEC
(6701)
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Rating:62Neutral
Price Target:
¥4,092.00
▼(-5.08% Downside)
Action:ReiteratedDate:02/27/26
The score is driven primarily by improving fundamentals (strong TTM revenue growth and margin expansion with manageable leverage), tempered by weaker cash-flow consistency. Technical indicators are a meaningful drag due to a clear downtrend and bearish momentum. Valuation is moderate (reasonable P/E, low dividend yield).
Positive Factors
TTM Revenue & Margin Expansion
A near 50% TTM revenue rebound alongside operating and net margin expansion signals improving demand and better execution or mix. Durable margin recovery increases internal cash generation capacity, supports reinvestment in services and R&D, and underpins sustainable profitability over months.
Negative Factors
Weaker Cash-Flow Consistency
Free cash flow has declined materially year-over-year and operating cash converts only a modest share of EBIT. This reduces buffer for capital expenditure, dividends or cyclical shocks, forcing reliance on earnings or balance-sheet levers and constraining long-term financial flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
TTM Revenue & Margin Expansion
A near 50% TTM revenue rebound alongside operating and net margin expansion signals improving demand and better execution or mix. Durable margin recovery increases internal cash generation capacity, supports reinvestment in services and R&D, and underpins sustainable profitability over months.
Read all positive factors
NEC (6701) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥5.27T
Dividend Yield0.55%
Average Volume (3M)4.22M
Price to Earnings (P/E)25.5
Beta (1Y)0.95
Revenue Growth2.68%
EPS Growth56.38%
CountryJP
Employees105,276
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)52.09
Shares Outstanding1,364,249,300
10 Day Avg. Volume5,395,680
30 Day Avg. Volume4,216,096
Financial Highlights & Ratios
PEG Ratio1.40
Price to Book (P/B)2.15
Price to Sales (P/S)1.22
P/FCF Ratio19.23
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥6,490.00Price Target Upside50.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)224.07
Revenue Forecast (FY)¥3.80T
NEC Business Overview & Revenue Model
Company Description
NEC Corporation operates as a provider of information and communication technology solutions in Japan and internationally. The company operates in five segments: Public Solutions, Public Infrastructure, Enterprise, Network Services, and Global. It...
How the Company Makes Money
NEC makes money primarily by selling ICT solutions and related services across long-term enterprise and public-sector programs. Key revenue streams include: (1) IT Services: revenue from systems integration projects (design, build, and implementat...
NEC Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Neutral
The earnings call highlights several positive outcomes, including record revenue and profit growth, strong performance in IT services, and significant free cash flow increase. However, these are balanced by notable challenges such as losses in the submarine cable business and investment outflows. Thus, the overall sentiment is mixed, with a balance of achievements and challenges.Positive Updates
Record Revenue and Profit Growth
Revenue for FY March 2025 was JPY3,423.4 billion, with a non-GAAP operating profit (OP) of JPY311.3 billion, achieving the mid-term management plan's targets a year ahead of schedule. Revenue increased by 5.3% year-on-year, and non-GAAP OP increased by JPY98.9 billion.
Negative Updates
Submarine Cable Business Loss
The submarine cable business recorded a JPY14 billion loss due to force majeure issues, resulting in project delays and additional costs.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue and Profit Growth
Revenue for FY March 2025 was JPY3,423.4 billion, with a non-GAAP operating profit (OP) of JPY311.3 billion, achieving the mid-term management plan's targets a year ahead of schedule. Revenue increased by 5.3% year-on-year, and non-GAAP OP increased by JPY98.9 billion.
Read all positive updates
Company Guidance
In the recent call, the company provided guidance for the fiscal year ending March 2026, projecting revenue of JPY3.36 billion and a non-GAAP operating profit (OP) of JPY320 billion. This represents an increase of JPY20 billion from the mid-term management plan target, despite macroeconomic uncertainties. The adjusted OP is expected to be JPY310 billion, factoring in ongoing structural reforms. The IT services segment is projected to post revenue of JPY2.15 trillion with an adjusted OP of JPY263 billion, while social infrastructure is expected to achieve revenue of JPY1.16 trillion and adjusted OP of JPY100 billion. The company also noted plans to increase investment in growth areas while maintaining a disciplined approach to capital allocation, applying cash ROIC evaluation for M&A transactions. The guidance reflects a continued focus on increasing profitability, even amid challenging conditions, and highlights strategic efforts to enhance operational efficiency and future growth potential.NEC Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.52T | 3.42T | 3.48T | 3.31T | 3.01T | 2.99T |
| Gross Profit | 1.12T | 1.06T | 1.01T | 958.25B | 886.41B | 861.18B |
| EBITDA | 510.86B | 422.03B | 382.92B | 356.76B | 330.96B | 331.06B |
| Net Income | 245.91B | 175.18B | 149.52B | 114.50B | 141.28B | 149.61B |
Balance Sheet | ||||||
| Total Assets | 4.11T | 4.32T | 4.23T | 4.04T | 3.82T | 3.73T |
| Cash, Cash Equivalents and Short-Term Investments | 441.34B | 584.62B | 476.49B | 419.46B | 430.78B | 523.35B |
| Total Debt | 636.30B | 666.36B | 573.64B | 608.48B | 597.38B | 702.86B |
| Total Liabilities | 1.96T | 2.24T | 2.14T | 2.13T | 2.04T | 2.16T |
| Stockholders Equity | 2.07T | 1.95T | 1.92T | 1.62T | 1.51T | 1.31T |
Cash Flow | ||||||
| Free Cash Flow | 327.27B | 218.00B | 171.46B | 74.41B | 76.41B | 203.97B |
| Operating Cash Flow | 458.82B | 344.41B | 271.23B | 152.13B | 147.52B | 274.91B |
| Investing Cash Flow | -280.77B | -242.17B | -76.02B | -49.59B | -63.38B | -87.49B |
| Financing Cash Flow | -227.66B | 7.03B | -155.51B | -122.79B | -189.62B | -33.61B |
NEC Technical Analysis
Negative
4311.00
Price Trends
4232.74
Negative
4949.25
Negative
4747.20
Negative
Market Momentum
-90.04
Negative
41.41
Neutral
35.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6701, the sentiment is Negative. The current price of 4311 is above the 20-day moving average (MA) of 4018.64, above the 50-day MA of 4232.74, and below the 200-day MA of 4747.20, indicating a bearish trend. The MACD of -90.04 indicates Negative momentum. The RSI at 41.41 is Neutral, neither overbought nor oversold. The STOCH value of 35.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6701.
NEC Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | ¥2.55T | 29.12 | 22.48% | 1.14% | 4.50% | 16.63% | |
64 Neutral | ¥756.11B | 20.55 | ― | 1.39% | 4.95% | 9.54% | |
62 Neutral | ¥5.27T | 25.48 | 12.48% | 0.55% | 2.68% | 56.38% | |
62 Neutral | ¥5.79T | 23.25 | 15.02% | 0.68% | -8.58% | 83.16% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | ¥679.64B | 22.20 | 10.07% | 1.76% | 11.66% | -0.21% |
* Technology Sector Average
JP:6701
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NEC Corporate Events
NEC Completes ¥27.3 Billion Share Buyback Ahead of Schedule
Mar 27, 2026
NEC Corporation has completed a share repurchase program authorized by its board on February 9, 2026, buying back a total of 6.8 million shares of common stock for approximately 27.29 billion yen. The latest tranche, executed between March 1 and M...
NEC Reports Progress on Share Buyback Program
Mar 13, 2026
NEC Corporation has repurchased 4,782,400 shares of its common stock on the Tokyo Stock Exchange between February 10 and February 28, 2026, at a total cost of about 18.77 billion yen. The buyback, conducted via discretionary trades, is part of a p...
NEC Launches ¥30 Billion Share Buyback to Bolster Shareholder Returns
Feb 9, 2026
NEC Corporation has authorized a share repurchase program under Japan’s Companies Act, approving the buyback of up to 6.8 million shares of common stock, or about 0.51% of its outstanding shares excluding treasury stock. The company set a ma...
NEC to Consolidate Major Enterprise and Public-Sector IT Business via Corporate Split
Feb 2, 2026
NEC Corporation will absorb the business for large-sized enterprises (excluding food services), governments, and municipalities from its wholly owned subsidiary NEC Solution Innovators through a simplified absorption-type corporate split effective...
NEC Overhauls Board and Management Structure Ahead of New Mid-Term Plan
Jan 29, 2026
NEC Corporation announced a broad reshuffle of its governance and executive structure, including new appointments to its Board of Directors effective after the June 2026 shareholders’ meeting and changes to Representative Executive Officers ...
NEC Releases Q3 FY2026 Results and Full-Year Outlook
Jan 29, 2026
NEC Corporation released materials outlining its financial results for the third quarter of the fiscal year ending March 31, 2026, together with full-year forecasts and selected business topics. The disclosure package appears to be a standard quar...
NEC Delivers Strong Nine-Month Earnings and Lifts Full-Year Profit Outlook
Jan 29, 2026
NEC reported solid consolidated results for the nine months ended December 31, 2025, with revenue rising 4.3% year-on-year to ¥2.42 trillion and operating profit surging 46.8% to ¥185.2 billion, helped by strong improvements in profitabi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.